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MEXICO CITY – President Enrique Peña Nieto said Tuesday that his government would invest the equivalent of about $3.4 billion in social and infrastructure programs for the beleaguered Mexican state of Michoacan, where armed vigilante groups have been clashing with a drug gang.

The program, which Peña Nieto announced in Morelia, the state capital, represents a significantly larger investment in Michoacan than the one unveiled last month by his social development secretary, Rosario Robles, who promised to spend about $225 million.

The funding will go to scholarships for students, pensions for the elderly and credits for small business owners, as well as for infrastructure projects such as highways and a new hospital.

The plan, Peña Nieto said, was meant “to recover security, establish conditions of social order and spur economic development.”

Trouble in Michoacan boiled over last month as vigilante “self-defense” groups went on the offensive. They took over communities around the city of Apatzingan, a key stronghold of the Knights Templar drug cartel, and threatened to march on the city. That forced Peña Nieto to send in thousands of troops and police, who continue to patrol many rural communities.

The spending is the federal government’s most significant acknowledgment that a long-term strategy is required in Michoacan, which has long suffered from poverty and lawlessness.

The plan for the southwestern state is somewhat similar to one launched by former President Felipe Calderon in the troubled border city of Juarez. Beginning in 2010, the Calderon administration spent hundreds of millions of dollars on social programs and new building in an effort to get at the root causes there of skyrocketing crime.

Homicides did decline in Juarez. However, observers suspected numerous reasons for the change – chief among them the fact that the Sinaloa drug cartel defeated the rival Juarez cartel in a battle for control of the city.